Costco (COST - Free Report) closed the most recent trading day at $347.66, moving -0.2% from the previous trading session. This move was narrower than the S&P 500's daily loss of 0.22%. Meanwhile, the Dow lost 0.78%, and the Nasdaq, a tech-heavy index, added 0.68%.
Heading into today, shares of the warehouse club operator had gained 7.25% over the past month, lagging the Retail-Wholesale sector's gain of 12.26% and the S&P 500's gain of 9.15% in that time.
Investors will be hoping for strength from COST as it approaches its next earnings release, which is expected to be September 24, 2020. On that day, COST is projected to report earnings of $2.80 per share, which would represent year-over-year growth of 4.09%. Meanwhile, our latest consensus estimate is calling for revenue of $51.99 billion, up 9.45% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $8.54 per share and revenue of $165.17 billion. These totals would mark changes of +4.27% and +8.17%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for COST. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 1.55% higher within the past month. COST currently has a Zacks Rank of #3 (Hold).
In terms of valuation, COST is currently trading at a Forward P/E ratio of 40.8. For comparison, its industry has an average Forward P/E of 22.33, which means COST is trading at a premium to the group.
Investors should also note that COST has a PEG ratio of 4.86 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. COST's industry had an average PEG ratio of 2.92 as of yesterday's close.
The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 96, which puts it in the top 38% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.